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Understanding the importance of cultural differences in business
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Walt Disney is the world leader in family entertainment and one of the most valuable brands in the world. Recently, Walt Disney has decided to open up a Disney Theme Park in Hong Kong China, which will be the first theme park in China. Since the opening of Euro Disney, the Walt Disney Company has learned to take into consideration important determinants so that their investment will not be a huge financial loss. Unfortunately, Since Disney did not research as much as they should of when deciding to open Euro Disney, this lead to one of the biggest failures for the Disney Company and is today used as an example of international marketing failures.
Disney had high expectations about opening up a Disney Theme Park in France. They projected 500,000 visitors to be in the park on opening day and the result was only 20,000 visitors. According to the textbook, international corporations should research and analyze their profitability level and the market size. Many international companies need to expense their research and development because it will only lead to big financial losses. Walt Disney Company should of used a transnational approach to achieve a consistent and controlled marketing strategy. Transnational approach has three types of variables such as demographic, psychographic and behavioral. A big problem that Disney overlooked was the lack of marketing to the French people, there were more visitors from outside of France then there was in France. After realizing their turnover they starting promoting special package prices for French residents.
Several fundamental points that affected the failure of Euro Disney's first 2 years were location, staffing, dining, prices and the opening of to many hotel rooms at ...
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... for American companies to realize that "their way" isn't always going to work, especially in a different country with such a different culture. Their Hong Kong project seems like they are taking precaution to prevent any huge financial losses. In spite of their mistakes, Disney is still one of the most important brands in the world and is widely recognized as a successful corporation.
Bibliography
"Euro Disney: An American in Paris" http://www.business.bham.ac.uk/business/images/cme_resources/Users/Szmigin/euro%20isney.doc
Businessweek.com. " Building a Mouse House in Hong Kong". April 11, 2002 http://www.businessweek.com/bwdaily/dnflash/apr2002/nf20020411_4498.htm
Doole, Isobel and Lowe, Robin. "International Marketing Strategy". Third Edition, Copyright, 2001.
Recklies, Dagmar. " Managing Resources-Accounting Assignment". Themanager.org
problems. In a study done on the role of the Walt Disney Company, Vincent Faherty explains
The impact of Disney on our society is based on providing this fantasy world to children. There is no other company on the globe that can do so with such success. It is a niche that children gravitate to. Yes, it makes a tremendous amount of money for the company, but there is no harm in providing products and services that children want. While Disney is ever present throughout our society, the impact on the culture is positive.
Walt Disney created Disneyland on July 17, 1955, and from this date it was deemed, “The Happiest Place on Earth.” Nearly every child today knows what Disney is and what it represents: imagination. Not all children have the privilege to go to Disneyland, but with the different movies and TV shows now circulating the world, Disney has made an impression on our youth, in the best possible way. Disney represents our children's imagination, creativity, hope, dreams, and debatably the most important one: family bonding time. Walt Disney’s Snow White was one of the first movies to produce retail products, that were distributed before the film release in order to maximize profit, giving Walt Disney the appearance of creating the marketing strategy. One of the most prominent methods of advertising that Disney used, was advertisements directed towards the children alone. For example, when a child would watch Disney’s television show, they would become enveloped and fascinated by what they saw. This would lead to the children asking for their own “little piece of Disney” at home. Disney was able to perfect this method by understanding that in 1955, the majority of the adults were working hard and had no time to spend with their children. Many parents of the working force felt bad for not spending more time with their children which lead to an increase in spending money on their children. Advertisers believed that by “planting the seed” at a young age, the children would not only bring sales now, but as well as in the future. “They have come to believe what RayKroc and Walt Disney realized long ago — a person’s “brand loyalty” may begin as early as the age of two.” (Schlosser 42). For example, our parents grew up going to Disneyland, and now take their own children back to Disneyland, as a tradition from past positive experiences. Walt Disney was able to
As financial consultants, we have been asked by Walt Disney’s management to provide an evaluation of this alternative to the company for this financing decision. For this estimate, we have reviewed the data of the Consolidated Income Statements from 1982 to 1983, the Consolidated Balance Sheets of 1984 and 1983, the Historical Summary of Average Yen/Dollar Exchange Rates and Price Indexes, ECU/Yen Swap flows in the following ten years, Yen Long-dated foreign exchange forward, Cash flow of 10-year ECU Euro bonds with sinking fund (Exhibit 6), and also the list of the French Utility’s outstanding publicly Traded Eurobonds.
The Walt Disney plans to expand its presence in other countries too mainly the emerging market like China that offers great opportunity. Due to its highly advanced infrastructure and higher population, the Disney already made a biggest investment till date on a development and construction of Disneyland theme park in Shanghai, China. The success of Disneyland Hong Kong and the presence of 330 million people that resides within the 3 hour commute to Shanghai allows the Disney to invest $5.5 billion on this theme park. The Disney CEO states that the park will be open for the visitors in the early The company know its various revenue generating streams very well.
The Walt Disney Company is a highly diversified media and entertainment company that has been growing by leaps and bounds since its inception in the late 1920’s. In the past few decades, The Walt Disney Company has expanded into numerous markets and diversified its business greatly. The company states that their corporate strategy is targeted at creating high-quality family content, exploiting technological innovations to make entertainment experiences more memorable, and expanding internationally. Upon studying the happenings of the company throughout the years, it is easy to see that the company is executing this strategy well through numerous strategic moves in the industry.
[1] Information was mainly taken from the Harvard Business Case Study “The Walt Disney Company: The Entertainment King”
In reviewing the vast corporation of the Walt Disney Company and all that it has to offer, one profound statement made by Walt Disney himself comes to the forefront, “I only hope that we don’t lose sight of one thing – that it was all started by a mouse” (Walt, n.d.). This statement suggests that the company has a strong focus to continually guide them in the way of the original idea of the company. Even as it watches the changes taking place in society and adapts to the new technologies and innovations, the Walt Disney Company has been able to implement diverse strategies for its growth and prosperity.
Disney failed to realize that while its strategy in Japan worked for Japan, its Japan strategy was not going to work in Paris. Disney decided to photo copy their operation and learned that was not acceptable. In 1992, several unforeseen issues arose that Disney was not prepared to handle. There were transatlantic airfare wars and currency movements that lead people to avoid traveling to Paris. Also, Disney was expecting a flocking of French people to visit the park; yet again basing their assumptions on the performance of the Japanese park (Cateora & Graham, 2007).
In addition, one weakness that can be concluded from the case study is Euro Disney’s ineffective marketing team when entering the European market. In fact, it is a failure of its marketing team to quickly react to the threatening environmental signals and especially predicting them before entering and positioning itself in the European market.
The first theme park opening in 1955 was Disneyland in California. After one full year of construction demands and a total investment of $17 million the Six thousands invitations to the grand opening had been mailed inviting people to experience the magic Disney had created but when the gates opened the Disneyland was far from magical. Workmen were still planting trees, the paint was still wet and the asphalt wasn’t set. The food stalls and restaurants ran out of food due to the high number of people because of counterfeit tickets being sold. Walt Disney didn’t know didn’t know what was going on because his attention was on the live broadcast. The rides broke down shortly after use. When Walt Disney World opened in 1971 the
The Walt Disney Company is known throughout the world as a leader in entertainment. The strategies that the Walt Disney Company have used include competitive advantage, a growth strategy, and a renewal strategy. When a person mentions a theme park, Disney is the first park that comes to mind. They were not the first theme park, but they have mastered the art of creating memories for adults and children alike. As a former employee of Disney I can vouch for the amount of effort that goes into creating memories for families. Disney is a leader when it comes to the theme park business, and other parks look at Disney as a leader. An example of this is that other parks will not raise admission prices, until Disney first raises their prices. WESH.com said "It remains to be seen if Disney's move will trigger a round of similar increases at other Orlando theme parks. Historically, when Disney raises its prices, the other parks follow" (2011, p.1). There is not a company in the world that can provide the "magic" that the Walt Disney World company can provide (Disney.com, 2011).
That is to say, Hong Kong Disneyland offers a uniquely western experience within the confines of Asia. The perception of Hong Kong Disneyland as a global brand can vary depending on the social groups that each consumer identifies as. Mainland Chinese visitors that are unaccustomed to western culture and modernity can feel as though they’ve stepped into a separate western sanctuary where they can fully experience another way of life. The more modern and westernised Hong Kong Chinese visiting the park are able to enjoy their visit in a relaxing
In 2005, Hong Kong Disneyland was opened. Before the open of Hong Kong Disneyland, the public always had a heat debate on whether the park would bring any problems to Hong Kong from the perspective of livelihood and economy. However, nobody realized that disneyization has already been affecting our daily lives. In the following essay, shopping centre Langham Place of Hong Kong will be used as an example to illustrate how shopping culture in Hong Kong are influenced by disneyization.
Connellan, Thomas K. Inside the Magic Kingdom: Seven Keys to Disney's Success. Austin, TX: Bard, 1997. Print.